Falling Gas Tax Revenue Leads to Slash in State Transportation Money

The timing seems less than coincidental, announcing a cut in transportation funding days after announcing a pilot program to study road users’ fees–but the message is just as stark. The State of California is running out of money to fund transportation.

Democrats in the Assembly are trying to keep the focus on the poor repair of the state’s roads rather than the need to raise more funds to fix them. Image: ##http://asmdc.org/fixtheroads/##California State Assembly Democrats##

Last week, the California Transportation Commission (CTC) slashed its own estimates of what the gas tax would bring in by $754 million over the next five years. The Commission’s action impacts what the state budget will look like for transportation and heralds dire news for counties and municipalities that were counting on state dollars to fund infrastructure needs.

“What this means is that almost every county in California that relies on this source of funding for projects that improve traffic and air quality will have to cut or delay projects indefinitely,” stated CTC Chair Lucy Dunn.

“The commission adopted the most optimistic scenario we could make in good conscience, in the hope agreement will be reached on a number of reforms and new funding increases currently under consideration by the Legislature. But failing that, I fear we will be faced with even more draconian cuts next year.”

While the state is exploring the option of switching away from the gas tax, that change won’t be happening for years. In the meantime, raising the tax seems the most likely way to solve the problem in the short-term.

Assembly Transportation Committee Chair Jim Frazier is recommending a series of revenue enhancements including a ten-and-a-half-cent-per-gallon increase to the gas tax (from its current level of twelve cents per gallon). Frazier has been outspoken on the issue of repairing California’s roads and is one of the legislative leaders of the “Keep California Moving” coalition of business, labor, and government groups.

However, movement from the legislature has been slow, despite a special session that was called last year specifically to look at the funding crisis. No idea to increase revenue gained traction, and the issue was tabled even as the backlog of transportation projects on hold grew. With last week’s action by the CTC, three quarters of a billion dollars in promised funds to county and local governments will likely need to be with held.

But if you’re expecting a bipartisan solution to the cash shortfall, don’t hold your breath. The Sacramento Bee talked to a Republican leader who seemed unaware that the state’s transportation funding crisis was an ongoing, long-term issue.

Following Brown’s State of the State address on Thursday, Senate Republican leader Jean Fuller of Bakersfield said that given the increasing amount of revenue California is taking in, “it seems a little premature to fix the newest problems with new taxes.”

The fix here is to stop adjusting the gas tax based on fuel prices (which creates backwards incentives) and simply use a fixed tax per gallon with an annual inflation (excluding fuel costs) adjustment. Decreasing tax per gallon in response to the cost per gallon going down makes no sense from either an economic or environmental standpoint.

GlobalLA

What happened to Brown’s Rainy Day funds? Oh I get it, those will used to subsidize other political agendas up in Sacramento…

“What this means is that almost every county in California that relies on this source of funding for projects that improve traffic and air quality will have to cut or delay projects indefinitely,” stated CTC Chair Lucy Dunn.

Everyone knows that “projects that improve traffic and air quality” is actually just code for widening roads. Maybe this drop in revenue, coupled with the pivot away from LOS, is the push that will finally force agencies to begin to start focusing on measures that actually reduce congestion, not just gobble up land and destroy our cities in a bid to provide space for every car to be at the front of every line all the time.

ALSO ON STREETSBLOG

Last year, Governor Brown called a “Special Session” to prod the California legislature to find solutions to what seemed an intractable problem: how to fund transportation needs in the state. Some bills were introduced, some hearings were held, but the biggest result of all the ballyhoo is a confirmation that the problem is, indeed, intractable. […]

In his 2015 State of the State, Governor Jerry Brown challenged the state legislature to come up with a funding formula that is both fair and that creates a sustainable funding stream for the state’s transportation trust fund. While the federal government continues to struggle to fund the national seemingly-always-beleagured Transportation Trust Fund, California now has […]

The California legislature held its first joint special session on transportation funding just before the holiday weekend. The session was called by Governor Jerry Brown when he and the legislature punted some big decisions so they could sign a budget before the June 30 deadline. The first extraordinary session of the Transportation and Infrastructure Development […]

What a fiasco. Six years after New Jersey Governor Chris Christie killed the ARC transit tunnel under the Hudson so he could avoid raising the gas tax, the jig is up. The state has run out of transportation funding anyway. NJ’s Transportation Trust Fund dried up a month ago, bringing a halt to basic infrastructure […]

In response to our recent story about legislative efforts to find a compromise on transportation funding, Streetsblog received the following post from Art Hadnett, president of HNTB’s West Division. HNTB is a national architecture, engineering, planning, and construction firm. Its first California project was Pasadena’s Arroyo Seco Bridge in 1914, and since then the firm […]

After several weeks of rumors, legislative leaders of the Special Session on Transportation and Infrastructure have released their proposal for a funding plan that shows how much compromise it can take to get an agreement. The bill, S.B. X1-1 and A.B. X1-26, is co-authored by Senator Jim Beall (D-Campbell) and Assemblymember Jim Frazier (D-Oakley), the […]